AUTOMAKERS
US deal creates barriers
Unions at South Korea’s two largest automakers, Hyundai Motor and Kia Motors, say plans to revise a free-trade deal with the US involve concessions that would prevent local automakers from entering the fast-growing US pick-up truck market. Hyundai’s labor union yesterday said that the South Korean government gave in to US President Donald Trump at a time when the US market represents big opportunities. Kia’s labor union said it shares that view. Hyundai said in a statement that it hoped the two governments would work together to defuse trade tensions. South Korea and the US agreed to push back the earlier agreed-to elimination of import tariffs on pick-up trucks by 20 years to 2041.
CHEMICALS
Akzo Nobel to sell unit
Akzo Nobel NV is selling its specialty chemicals unit to US private equity firm Carlyle Group for 10.1 billion euros (US$12.5 billion) in a deal set to transform the Dutch company into a supplier of paints and coatings, chief executive officer Thierry Vanlancker said yesterday. Carlyle and Singapore sovereign-wealth partner GIC edged out rivals by agreeing to keep the business intact and giving assurances on workers’ salaries and benefits. “Different bids had different dimensions,” Vanlancker said. “Carlyle saw it as a strong business as a whole.” The sale caps a turbulent period for the Dutch manufacturer marked by a US$29 billion hostile takeover attempt last year by rival PPG Industries Inc and the attention of activist investor Elliott Management. Vanlancker, who sought to keep Akzo Nobel’s future in its own hands, will now have to make good on ambitious financial targets set for 2020.
RETAIL
Amazon targets France
Amazon.com Inc is taking aim at France, securing a delivery deal in Paris with Casino Guichard Perrachon SA that shakes up one of Europe’s most competitive grocery markets. Items from Casino’s Monoprix stores are to be sold via the Amazon Prime Now app in the French capital and the surrounding region, the companies said on Monday. The move comes as Amazon pushes further into the food business in Europe and as price competition among Casino, Carrefour SA and family-owned Leclerc heats up in France. Casino’s deal with Amazon is a “very defensive move,” aimed at protecting Monoprix from Leclerc, Fabienne Caron, an analyst at Kepler Cheuvreux, said in a note to clients.
BANKING
Deutsche Bank tensions rise
Deutsche Bank AG is considering candidates to potentially replace chief executive officer John Cryan amid heightened tensions between him and Supervisory Board chairman Paul Achleitner, the Times of London reported without saying where it got the information. The bank approached Richard Gnodde, the head of Goldman Sachs Group Inc’s international operations, but he is thought to have spurned the overture, the newspaper said. Deutsche Bank also considered UniCredit SpA CEO Jean Pierre Mustier and Standard Chartered PLC CEO Bill Winters, according to the report. “Cryan may be a good person, but he’s not the right guy on top of Deutsche Bank,” said Stefan Mueller, CEO of the German Institute for Asset and Equity Allocation and Valuation in an interview with Bloomberg TV. Still, “I think the main problem at Deutsche Bank is Paul Achleitner, he implemented all these CEOs in the last years.”
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
RSS